(Bloomberg) -- Treasuries fell, sending most yields to the highest levels in more than a week, as the latest slide in the value of the Japanese currency compounded bond investors’ anxiety.

The yen’s drop to a 38-year low versus the dollar coincided with the biggest of the Treasury’s note and bond auctions this month — $70 billion of five-year securities. Also Wednesday, Australian government bonds tumbled on hotter-than-expected inflation data — a day after the same happened in the Canadian bond market. Key US inflation data are due on Friday.

Yields on long-dated securities led the move, with 10- to 30-year rates more than five basis points higher on the day. The 10-year note’s rose as much as seven basis points to 4.32%, the highest level since June 13. The reaction in US government bonds to yen weakness reflects the prospect that Japan could liquidate some of its Treasury holdings to defend the currency.

“The market is taking a pause given the uncertain political backdrop emerging both domestically and abroad,” said George Catrambone, head of fixed income at DWS Americas. “The re-inflation surprises in Canada and Australia don’t help,” and the calendar is also a factor, as the approach of month-end can tend to curb risk-taking, he said.

The yen fell as much as 0.7% to 160.82 per dollar, blowing past levels that last led officials to intervene in the market in April. The yen has weakened more than 12% this year, raising the price of imports, hurting Japanese consumers and causing growing unease among businesses.

“Japan is going to be more willing to sell Treasuries, for domestic reasons and intervention reasons,” said Tony Farren, managing director in rates sales and trading at Mischler Financial Group.

The yen’s collapse shortly after the US trading day began further unnerved traders assessing the rout in Australian government bonds triggered by domestic inflation data. The nation’s consumer price index rose 4% in May from a year earlier, more than economists estimated. Its two-year yield surged 18 basis points to the highest level since November as traders boosted bets that the Reserve Bank will resume raising interest rates at its next meeting.

US bond traders are likewise battling doubt about whether the Federal Reserve will deliver rate cuts this year. They no longer fully price in more than one by year-end, compared with six at the start of the year. Fed Governor Michelle Bowman on Tuesday said she expected rate cuts would begin in 2025, not 2024. Later on Tuesday, a selloff in Canadian government bonds sparked by unexpected inflation acceleration bled into Treasuries.

“People are starting to come to realize there’s a ways to go before we conquer inflation,” Farren said.

US inflation data for May to be released Friday — the price index for personal consumption expenditures, or PCE, the Fed’s favored inflation gauge — has been forecast to show cooling. The consumer price index, a different gauge of US inflation, showed deceleration in May when it was released in mid-June, fueling gains for Treasuries that sent yields to the lowest levels since early April.

The five-year Treasury note auction at 1 p.m. New York time drew a yield slightly lower than where it was trading at the bidding deadline, a sign of strong demand. A $69 billion auction of two-year notes on Tuesday also drew good demand. The auction cycle concludes Thursday with a $44 billion seven-year note auction.

(Adds auction results in last paragraph, trader comments in sixth and ninth paragraphs, and updates market levels.)

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